The current price of a stock is $22, and at the end of one year...
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Finance
The current price of a stock is $22, and at the end of one year its price will be either $27 or $17. The annual risk free rate is 8.0%, based on daily compounding. A 1-year call option on the stock with an exercise price of $22 is available. Based on the binomial model what is the option's value?
a. $3.55
b. $3.41
c. $3.23
d. $3.15
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